Perhaps the only topic that entertains more myths than the
federal deficit is welfare. Reagan once described a Chicago Welfare Queen
driving a Welfare Cadillac. Allegedly, she had used 80 different names
to collect $150,000 in benefits. When the press tried to track her down,
they discovered she did not even exist. Nonetheless, this apocryphal anecdote
has enjoyed lasting fame - among both conservatives and liberals, for different
reasons.

One of the most popular myths is that welfare
is a serious drag on the economy. Actually, it barely registers on the
radar screen. The most vilified form of welfare is Aid to Families with
Dependent Children (AFDC), which allegedly gives poor mothers a financial
incentive to avoid work and have babies. Together, AFDC and Food Stamps
are by far the largest items of the welfare budget. Yet in 1992, AFDC formed
only 1 percent of the combined state and federal budgets. Food stamps also
took up 1 percent.1 If you expand the definition
of "welfare" to include all one-way transfers of benefits (such
as student grants, school lunches and pensions for needy veterans), then
welfare takes up only 12 percent of the combined budgets.2
(More)

Another myth is who gets welfare. Mention the
word "welfare" and most people automatically think of the poor.
But the fact is that corporations and the rich receive far more welfare
than the poor. Welfare for the poor (AFDC and Food Stamps) totaled $50
billion in 1992, but welfare for corporations (pork-barrel projects, business
subsidies and tax breaks) are estimated to run from $85 billion to $800
billion, depending on which think tank you listen to. (More)
Brian Kelly, a Washington journalist who has written a book on corporate
pork, discloses that pork alone costs taxpayers between $20 to $100 billion
a year.3By itself, the $500 billion
dollar Savings & Loan bailout would have funded 10 years of AFDC and
Food Stamps. There is simply no question who receives the most welfare
from government.

During the 80s, government spending on individuals increased for everyone
except the poor. The reason is because the poor cannot afford lobbyists
to defend their interests in Washington; consequently, politicians find
the poor easy targets for budget cuts. Between 1970 and 1991, the purchasing
power of benefits for the typical AFDC family fell 42 percent, primarily
as a result of state and federal cuts.4

It is impossible to live well on welfare alone, and most recipients
go hungry near the end of the month. In 1992, the poverty level for a mother
with two children was $11,186.6 In that
year, the average yearly AFDC family payment was $4,572; Food Stamps for
a family of three averaged $2,469, for a total of $7,041. That was only
63 percent of the poverty line, and 74 percent of a minimum wage job.

During the 50s, poverty hovered around 20 percent. Michael Harrington
had to write a bestseller entitled The Other America to remind the
middle class that not all Americans were living like Ward and June Cleaver.
In 1964, Johnson declared war on poverty with his "Great Society"
program. The increased welfare payments reduced poverty to 12 percent by
the end of the 60s.

Generally, the poverty level mirrors the unemployment rate. Unemployment
is greatest during recessions; as unemployment gradually falls over the
years following a recession, poverty falls too. But if you look at the
general trends between recessions, you can see that poverty rates were
lower in the 70s than in the 80s. This is largely due to deepening cuts
in individual welfare benefits.

Another myth is that the burgeoning incomes of the top 1 percent allowed them to
give more to charity. In fact, the rich drastically reduced their charitable
donations in the 80s, and the poorest raised them, despite their declining
incomes. In 1990, the poorest income group -- under $10,000 -- actually gave
the highest share to charity: 5.5 percent.8

* Dividing $72,784 by $1 million seriously skewers the percentage because of the
open-endedness of this income group, which includes
multi-millionaires and billionaires.

Another set of myths surrounds who is on welfare for the poor, and
for how long. The following statistics were compiled in 1994, but they
also reflect the trends of the Reagan-Bush years:

Traits of families on AFDC10

Race
White 38.8%
Black 37.2
Hispanic 17.8
Asian 2.8
Other 3.4
Time on AFDC
Less than 7 months 19.0%
7 to 12 months 15.2
One to two years 19.3
Two to five years 26.9
Over five years 19.6
Number of children
One 43.2%
Two 30.7
Three 15.8
Four or more 10.3
Age of Mother
Teenager 7.6%
20 - 29 47.9
30 - 39 32.7
40 or older 11.8
Status of Father 1973 1992
Divorced or separated 46.5% 28.6
Deceased 5.0 1.6
Unemployed or Disabled 14.3 9.0
Not married to mother 31.5 55.3
Other or Unknown 2.7 5.5

As you can see, the stereotype that the average welfare recipient
is a teenage black mother with several children is completely false, and
not a little racist. The fact that blacks make up only 12 percent of the
population but 37 percent of AFDC recipients reflects the continuing discrimination
they experience on the job market.

Another set of myths surround the "incentives" that welfare
supposedly brings. In March 1987, the General Accounting Office released
a report that summarized more than one hundred studies of welfare
since 1975. It found that "research does not support the view that
welfare encourages two-parent family breakup" or that it significantly
reduces the incentive to work.11

Nor does welfare give single mothers an incentive to bear more
children. AFDC families are not much larger than the national average.
In an effort to curb this supposed incentive, New Jersey became the first
state in the nation to experiment with a "family cap." The cap
denies mothers extra welfare benefits for having more babies. And did the
cap result in fewer births among AFDC mothers? At first, the Heritage Foundation
reported that AFDC births fell 29 percent - a tremendous result. But no
other study confirmed this finding, and it soon became clear it was nonsense.
The Heritage study failed to report that birthrates for New Jersey in
general were falling also. A Rutgers University study by Michael Camasso
found that the family cap had no effect on welfare birthrates. His study
researched two groups of women: mothers who would receive more benefits
if they had additional children while on welfare, and those who would be
denied more money under the family cap. Camasso wrote: "From August
1993 through July 1994 there is not a statistically significant difference
between the birth rates in the experimental and control groups."

Many other studies have confirmed that welfare provides almost no extra
incentive to have children. An 8-year study in Wisconsin, which is undergoing
massive welfare reform, has found that women on welfare actually have a
lower-than-average birthrate than non-welfare women! In fact, their birthrates
were lower than the national average. Perhaps the greatest problem
with "incentive" theories is that welfare payments are too small
to provide any meaningful incentive.

One factor that would relieve the number of mothers on welfare would
be the greater financial support of fathers. In 1989, only three-fourths
of the women who were awarded child support received payments of any kind,
and only half received full payments. The mean child support payment was
$2,995; for women whose incomes were below the poverty level, the mean
was only $1,889.12 Obviously, even full
payments are inadequate amounts for raising a child; before a society should
condemn welfare moms, it should consider rousting out deadbeat dads.

The "feminization of poverty" has been especially hard on
the nation's children. America has the greatest level of child poverty
anywhere in the industrialized world:

Percent of children below the poverty level13

1970 14.9%
1975 16.8
1980 19.5
1985 20.1
1990 19.9
1992 21.1

Next Section: A Comparison of the U.S.
to Other Rich Nations
Return to The Reagan Years Home Page
___________________
1 Combined federal, state and local
AFDC payments in 1992 totaled $24.9 billion; food stamps also totaled $24.9
billion. The combined federal, state and local expenditure for that year
was $2,487 billion; so these programs each comprised 1 percent of the budget.
Sources: Library of Congress, Congressional Research Service, "Cash
and Noncash Benefits for Persons with Limited Income: Eligibility Rules,
Recipient and Expenditure Data, FY 1990-92," Report 93-832 EPW, and
earlier reports; U.S. Bureau of the Census, Government Finances,
series GF, No. 5, 1992.
2Ibid.
3 Brian Kelly, Adventures in
Porkland (New York: Random House, 1992,1993), p. 50.
4 Paul Taylor, "When Safety Nets
Leave the Needy in Free Fall," Washington Post National Weekly
Edition, September 9-11, 1991.
5 AFDC figures from U.S. Social Security
Administration. Food Stamp figures from U.S. Department of Agriculture,
"Annual Historical Review of FNS Programs" and unpublished data.
Current dollars converted to constant 82-84 dollars from CPI published
by U.S. Bureau of Labor Statistics (1982 PPI = $1.00).
6 U.S. Bureau of the Census, Poverty
in the United States, Series P-60, No. 185, 1993.
7 U.S. Bureau of the Census, Current
Population Reports, P60-185.
8 Survey by Gallup Organization and Independent
Sector, cited by Boston Globe, "U.S. Charities See Increase in Gifts,"
December 16, 1990.
9 Internal Revenue Service data of Adjusted
Gross Incomes for itemized reductions. Cited by Business Week, "Look
Who's Being Tightfisted," November 5, 1990, p. 29.
10Overview of Entitlement Programs,
Committee on Ways and Means, U.S. House of Representatives (U.S. Government
Printing Office, 1994).
11 The GOA report was summarized in
Frances Piven and Richard Cloward, "The Historical Sources of the
Contemporary Relief Debate," The Mean Season: The Attack on the
Welfare State, Fred Block, Richard Cloward, Barbara Ehrenriech and
France Piven, eds., (New York: Pantheon, 1987), pp. 58-62.
12 U.S. Bureau of the Census, Current
Population Reports, P60-173.
13 U.S. Bureau of the Census, Current
Population Reports, P60-185.